Chinese producers of polysilicon, a building block for solar panels, are in talks to create a 50 billion yuan ($7 billion) fund to acquire and shut down roughly a third of production capacity and restructure part of the loss-making sector, GCL Technology Holdings said.
The top polysilicon producer told Reuters on Thursday plans were being discussed to acquire and shut at least 1 million metric tons of lower-quality polysilicon capacity.
“It is sort of like the OPEC of the polysilicon industry, wherein total supply for a specified timeframe has to be agreed by the central committee and production quotas to be allocated to producers,” GCL’s investor relations director Jun Zhu said.
The plan is one of the strongest signals yet that the heightened rhetoric against overcapacity rolled out by the Chinese government this month is translating into action. Chinese industries, from solar to electric vehicles, are grappling with massive overcapacity and vicious price wars that are wiping out profits.
[…]
Quite weird to see that seen that solar is barely 5% of the total energy supply worldwide. Instead they should shut down coal/oil/gas to free up demand for alternatives
The issue isn’t lack of demand - it’s that China overbuilt polysilicon capacity way beyond what the market needs right now. They’re producing like 3x the global demand, which crashed prices and made everyone unprofitable. Solar IS growing fast, but the manufacturing side got way ahead of itself in a classic boom/bust cycle.